American businessmen and investors meeting with Minister Paulo Guedes (Economics) in Washington asked him to reaffirm the goal of becoming carbon neutral by 2050, and that Brazil’s Congress recommends a trade protocol signed between the two countries for one year. confirms that it can be effective.
President Jair Bolsonaro (non-party) announced at an event in April that Brazil projected its carbon neutrality target – effectively, to eliminate or offset all of its pollutant emissions – by 2060 to 2050. The change has not been formalized yet.
“This is a high priority, as it symbolizes Brazil’s commitment to its climate and sustainable ambitions, and will give the US investor confidence,” says Cassia Carvalho, executive director of the Brazil-US Business Council. US Chamber of Commerce.
Geddes met with representatives of the US Chamber of Commerce last week at a hotel near the White House. Executives from companies like AES, Apple, Citigroup, Dow, Embraer, FedEx and Morgan Stanley were present.
At the meeting, government representatives responded that Brazil is working to advance environmental goals and taking steps to improve the business environment for investments considering ESG (Good Environmental, Social and Governance Practices) criteria .
“Many funds have ESG criteria to invest in. There is a great liquidity of resources, but there is a lack of projects and opportunities that meet these criteria. Brazil should focus on investors who are concerned with environmental issues”, Carvalho analyzes.
The delegates also asked the government to help speed up approval at the Brazilian Congress of the Trade Rules and Transparency Protocol, signed in October 2020, but which depends on legislative approval to be implemented. In the US, the document did not require the approval of Congress.
The protocol provides for changes in three areas: trade facilitation and customs administration, good regulatory practices and anti-corruption. The agreement provides for new rules for prior consultation and punishment and for the adoption of provisions similar to those adopted in the USMCA treaty (between the US, Mexico and Canada).
On the corruption side, the treaty expands operations relating to money laundering, recovery of funds from illegal sources, denial of entry to foreign government officials involved in corruption, and additional protections for whistleblowers.
The Brazilian Council of Directors assesses that issues such as devaluation real, high inflation and energy prices should be accommodated in the short and medium term, but Brazil’s position on environmental issues will remain relevant to trade relations for a very long time.
Alberto Ramos, director of the Latin America Economic Research Group at Goldman Sachs Bank, assesses that the current scenario in these areas is more ambiguous.
“Progress on structural reforms and much-needed fiscal consolidation efforts have been slow and sometimes uncertain. And the stability and strength of some key fiscal anchors, including spending limits, have been increasingly questioned. Fiscal risks remain high, and this Puts pressure on long-term interest rates,” Ramos said in a virtual debate with Central Bank President Roberto Campos Neto.
Ramos also highlighted the fact that the country has reached double-digit inflation, rising energy prices, risks of rationing and political uncertainties. “We have a very complicated election ahead of us, with uncertain results and a lack of clarity about policy directions that follow. And this uncertainty will not be resolved soon, as elections are more than a year away,” he said.
Despite the uncertain outlook, foreign trade between the US and Brazil is at an all-time high, according to data from Amcham (Brazil-US Chamber of Commerce) released last week. Between January and September, US$49.6 billion was traded, the highest ever recorded volume since 1997, when the organization’s trade monitor was created.
Brazil’s exports to the United States totaled US$22.3 billion in the period, an increase of 47.1% compared to the same period last year. Steel, fuel, aircraft and wood products remained the most different in sales. The amount destined for the United States accounts for 10.4% of the world’s total Brazilian exports.
Brazil’s imports from the United States reached an unprecedented value of US$27.3 billion, up 29.8% in 2020. Purchases of natural gas and health products, such as vaccines, fueled the growth.